If you have already made a budget, you’re well on track to getting ahead of most people who fail to budget. However, sticking to your budget is another challenge entirely. By doing so however, you can achieve your financial goals. Here are 4 ways to stick to your budget.
After you have prepared your budget, you might find it difficult to follow during the first few months. However, with a little help from Humaniti, you can more easily stick to your budget and stay on the path to achieve financial wellbeing.
1. Track and curtail your expenditure
One of the top reasons people struggle to control their burgeoning expenses is their failure to track their expenditures accurately. By reviewing and understanding your expenses, you will be able to determine your primary expenditure categories, which will help you curtail unnecessary expenses.
Humaniti can help simplify this process by doing the work for you. When you connect your bank accounts, the app does the work of categorising your expenditure. That way you can concentrate on understanding your behaviour and habits and decide if you need to reduce your expenditure. A small recurring expense can add up to a sizeable total at the end of the month. (Coffee anyone?!)
2. Reduce your reliance on credit
It may be tempting to use your credit card for discretionary expenses, but you can easily overspend your budget if you are not careful. Paying in cash (or by debit card) instead of buying on credit can help you avoid breaching your budget. By using your hard-earned cash as opposed to credit, you’ll think twice about purchases and will also avoid high interest repayments.
When you link your debit accounts and credit accounts with Humaniti, you’ll be able to track how you’re spending and learn where you can save. A transparent view of your monthly incomings and outgoings are presented on your dashboard, so you can easily monitor your use of credit. Another benefit of linking all your accounts, is that you’ll be able to monitor any debt you owe, including credit card debt. Having a clear understanding of your debt is a critical step to building a better financial future.
3. Consider automatic deposits to your emergency and sinking funds
Personal finance experts recommend setting up emergency and sinking funds to prepare for emergencies and to finance large purchases. When you are reckless with your expenses, your emergency and sinking funds can get underfunded, which might create financial problems for you in the future.
To ensure that you save some money each month from your paycheck, consider establishing an automatic deposit to a dedicated emergency fund savings account. By establishing an automated savings plan, your bank will automatically deduct your specified amount to your savings account on a recurring basis, which will help you avoid the temptation to spend stay beyond your budget.
4. Minimise debt
If you need to borrow money to finance your purchases, think twice before making your purchase. The proliferation of buy now pay later services and easy to access credit make it all too easy to buy items that you can’t afford. Avoid falling into a debt trap by avoiding incurring debt where possible. Consider paying in cash (by debit card) instead, and if you can’t afford the item, think twice.
Humaniti can help you stick to your budget by surfacing the key information you need to help you keep your expenses in check and remain disciplined. The more money you can save and invest today, the better off you will be in the future.
* Disclaimer – the information in this post is general only and does not constitute financial advice.